SPY continued its downward movement today and broke below key support at 142.78. This level had stopped all the previous dips. This area should act as resistance going forward. The selling did stop at the uptrend since June and consolidation level before the August breakout- this support at 140.70 will need to hold for the market remain in a bullish uptrend. Below this represents a bearish tilt for the market. The market can get bullish again if it can get back above the 142.78, the first test is at 142.25. The market has the potential to go lower based on the descending triangle pattern.
The descending triangle starts at the highs in October and trended to last week high. It is about a 3.5% price target which would put SPY at 137.20. This would represent a correction of about 7% from the highs. Since June the market has not corrected more than 3%.
Other things to watch here are the Dollar at resistance at 80.00 and XLF at support at 15.70. If you were watching copper the drop was not surprising.
